alt Hacker NewsIMO this looks largely like another circular investment. Amazon's investment is tied to OpenAI using AWS for their Frontier product and I assume Nvidia's conditions are that OpenAI continue buying hardware from them. Then there's SoftBank though given that those are the same guys that invested heavily in WeWork, I assume this is just very brash bullishness on their part.
From my perspective, I hope that OpenAI survives and can pull of their IPO but I just have that nagging feeling in my gut that their IPO will be rejected in much the same way that the WeWork IPO was rejected.
On the one hand you can look at these companies investing and take it as a signal that there is something there (in OpenAI) that's worth investing in. On the other hand all these companies that are investing are basically getting that investment back through spending commitments and such and are just using OpenAI as a proxy for what is essentially buying more revenue for themselves.
When their IPO hits later this year I hope that it's the former case and there's actually some good underlying fundamentals to invest in. But based on everything I've read, my gut is telling me they will eventually implode under the weight of their business model and spending commitments.
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Circular investing can be a smoke screen.
But it can also simply be the financial framing for direct bartering. Which is even more direct than regular financial transactions.
"I will provide these resources you need, in exchange for part ownership", and/or "a limited license to your tech", "right to provide access to our customers on these terms", Etc."
Amazon doesn't need any frothy fake revenue. But they do want to offer their customers the most in demand models, with the best financial terms for Amazon.
Nvidia wants customers, but not at the expense of throwing money away. Their market cap may be volatile, but their books are beyond solid.
I would be a lot more concerned if OpenAI was getting "funding" from a quantum computer startup, and vice versa.
The "circular investment" is mostly start up companies using their stocks instead of cash to pay for server hardware and cloud computing. There is a few extra steps in between that make things look weird and convoluted, but the end results is really just big companies giving hardware and getting shares of ai companies in exchange for it.
It's not "continue" buying as much as this is NVIDIA fronting the money for (most of) the hardware OpenAI has already ordered from them. It's like borrowing rent money from your drug dealer.
> On the one hand you can look at these companies investing and take it as a signal that there is something there (in OpenAI) that's worth investing in. On the other hand all these companies that are investing are basically getting that investment back through spending commitments and such and are just using OpenAI as a proxy for what is essentially buying more revenue for themselves.
I don't understand how this is some kind of cheat code. Let's say I give you $100 on the condition that you buy $100 worth of product from me. And let's say that product cost me $80 to produce. Isn't that basically the same as me giving you $80? I don't see at all how that's me "basically getting that investment back".
Comparing OpenAI and WeWork is a nonsensical perspective. OpenAI is shipping the most revolutionary product in a generation, with 800 million monthly active users. It's the fastest revenue ramp ever, at incredible scale -- $20B+ ARR. These are real fundamentals. They matter. And the cost of inference is coming down all the time.
WeWork was a short-term/long-term lease arbitrage business. The two are nothing alike.
Nvidia sells the picks, AWS rents the mine, OpenAI digs, and the money just loops around the table...
I am expecting OpenAI stock to be the most volatile in history. The first 3-6 months will be fun.
This piece that was on HN yesterday corroborates your gut: https://www.ben-evans.com/benedictevans/2026/2/19/how-will-o...